THE ULTIMATE GUIDE TO SELLING AT THE HOME DEPOT ®

Compiled & Published by Askuity The Ultimate Guide to Selling at The Home Depot

CONTENTS

Foreword: Hitting the Nail On The Head A brief overview of what you’ll learn in this eBook 03

A Closer Look at The Home Depot A closer look at The Home Depot’s customers, products, competitors, and more 04

Chapter 1: Pitching to The Home Depot How to get your product on to The Home Depot’s shelves 07

Chapter 2: Building Your Success At The Home Depot Strategies to help you succeed at The Home Depot 09

Chapter 3: Omnichannel at The Home Depot Exploring The Home Depot’s brick-and-mortar, online, and mobile strategy 14

Chapter 4: How To Succeed at Trade Shows What it takes to be the best at industry specific trade shows 19

Chapter 5: Home Depot Merchant Meetings & Line Reviews Best practices for business and line reviews 21

Final Thoughts Key takeaways from the eBook 25 PAGE 03 The Ultimate Guide to Selling at The Home Depot Hitting the Nail on the Head Foreword

With home values on the rise and do-it-yourself projects continuing to gain popularity, the home improvement space is hotter than ever. The Home Depot continues to prosper while many retailers shrink or even collapse. In fact, The Home Depot hasn’t opened any new stores since 2008, with their impressive growth driven by increased traffic and more average spending per customer.

The Home Depot should be at the top of every vendor’s wish list when seeking retail distribution in the home improvement space. In fact, it has been said that there are two types of home improvement product vendors: those who sell to The Home Depot and those who want to sell to The Home Depot.

Getting listed and remaining on shelf is no easy feat, though. Our team works with leading vendors and consultants across a variety of categories. With their input, this eBook dives deep into the world of The Home Depot. It will equip you with strategies and tips on how to get, stay, and succeed in the world’s largest home improvement retailer. PAGE 04 The Ultimate Guide to Selling at The Home Depot A Closer Look at The Home Depot

By The Numbers Today, The Home Depot is the world’s largest home improvement retailer with more than 2,200 stores (1,979 in the U.S. alone) and nearly 400,000 asso- ciates in the U.S., Canada and Mexico. The typical store averages 105,000 square feet of indoor retail space, interconnected with an e-commerce business that offers more than one million products for the do-it-yourself customer, professional contractors, and the industry’s largest installation business for the “Do-It-For-Me” customer.

400,000 105,000 2,274 ASSOCIATES SQ FT AVG. STORES STORE SIZE

Product Selection The Home Depot carries over 35,000 products in store and over one million products online. This retailer’s departments span everything from appli- ances to building materials and tools.

The Home Depot carries several exclusive and private label brands, including all the brands shown on the left. PAGE 05 The Ultimate Guide to Selling at The Home Depot

The Home Depot Customer That being said, Home Depot realizes the fast- est-growing segment in home ownership are millen- To stay on top of the industry, The Home Depot is nials. The retailer sees the younger generation as focusing on a blended strategy, appealing to profes- more interested in do-it-for-me services and as sionals and everyday consumers. Their customer value-conscious. (Source) base can be broken down into three main categories: In summary, the key to Home Depot’s success is • Do-it-yourselfers who buy products and helping professionals do their jobs efficiently and install them in their homes. cost effectively while educating amateur home Do-it-for-me customers that seek Home • remodelers to help them build with confidence. Depot’s own installation or consulting services. (Source) • Professional customers such as contrac- tors, builders, plumbers, painters, and other Competitive Landscape home-improvement experts. The Home Depot faces its stiffest competition from

It’s important to note that professional contrac- Lowe’s, another leader in the home improvement tors make up just 3 percent of The Home Depot’s space. Overall, these retailers seem to be more customer base, but generate 40 percent of its similar than different in their customer demo- revenue. (Source) graphic, though the two have very different strate- gies for engaging them.

In terms of layout, The Home Depot has more of a warehouse look, which makes it more appealing to professionals and contractors. Lowe’s is less indus- trial in appearance, with stores featuring more elaborate floor displays and themed products such

We are focused on being a valued “partner for our Pros by offering solutions both in-store and at the jobsite that help them to more effectively manage their business. This includes enhancing our leadership position in tool rental.”

Baby boomers are Home Depot’s most important - Craig Menear, Chairman, CEO & President The Home Depot – Q2 customers, accounting for about half of the retailer’s 2017 Home Depot Earnings Call 08/15/17 revenue. This should not come as a surprise, consid- ering about 40% of US homeowners are boomers, as patio sets and holiday decor items. This makes and they own about half of the total home value in it a less intimidating environment for the average the country. (Source) shopper, as well as female consumers. PAGE 06 The Ultimate Guide to Selling at The Home Depot

What’s interesting about the relationship between As you’ll learn throughout this eBook, The Home The Home Depot and Lowe’s is that they’re always at Depot excels at customer service and prides itself on each other’s heels, taking the leading position back always putting the customer first. While some strat- and forth from one another. They also learn from egies may naturally shift over time, this is one thing each other and often iterate on strategies. that will always remain at this retailer’s core.

“Big companies like The Home Depot and Lowe’s may seem slow to change, but in reality, they are quite nimble and changing all the time. They are constantly testing very innovative ways to market and sell. They learn from each test and then choose whether or not to adopt the approaches, products and brands that pass those tests.”

- Mark Mitchell, Whizard Strategy PAGE 07 The Ultimate Guide to Selling at The Home Depot

Chapter 1 Pitching to The Home Depot

If you’re already on Depot’s shelves, feel free to the National Hardware Show. The Home Depot and skip ahead to Chapter 2 where we’ll talk about other big-name home and hardware retailers regu- how to succeed at this retailer. larly attend this tradeshow. Showcasing your brand in this show will give you the opportunity to network If you take a look at their corporate website or and showcase your products to HD Merchants. speak with Merchants, you’ll see that innovation is a priority at The Home Depot. It’s built into every part Check out Chapter 4 for tips on how to succeed at of their product selection process. trade shows.

The Home Depot has a fairly standardized process “Buying Days” are another great opportunity to for pitching and submitting new products. HomeDe- get exposure to Home Depot Merchants. Buying potLink provides suppliers and business partners Days are special events that offer exclusive face-to- with access to information and systems used for face meetings with retail Merchants and merchan- conducting business with The Home Depot. New dising directors from leading domestic and inter- potential vendors are asked to go through their New national home improvement retailers. They allow Product Submission site. you to introduce your company, products and new merchandising programs, and schedule follow-up That being said, there are other opportunities to get meetings, often at trade shows. These happen your foot in the door. Just like when applying for a on a regional and sometimes store level, and are job, you always want to find a way to get a warm often arranged by outside organizations. Here is an introduction or a direct outreach opportunity, as example from The President’s Council who hosts opposed to simply applying online. buying days in various locations and retailers across A tip that consultant Mark Mitchell wanted to pass North America. along is that you should make an appearance at The best job candidates and vendors are the ones PAGE 08 The Ultimate Guide to Selling at The Home Depot

“I love engaging with the Merchants and vendors, meeting people from different indus- tries and seeing how they try to create value in their businesses. But, we all have one thing in common — we want to keep the customer front and center to make sure we are satisfying their needs.” - Ted Decker, EVP of Merchandising at The Home Depot (Source)

who find a way to stand out in their approach. To displays. You should repeat this exercise periodi- do that with The Home Depot, you need appeal to cally, given that The Home Depot continuously adds the Merchant’s needs (innovation, margin, sales new products and vendors. velocity, etc.) and show that you’re an expert in your Having done this research, you’ll have a better category, know how you compete, and bring your handle on why you’re unique and what makes your A-game online. brand stand out, and articulate why The Home We’ll talk about these tips in more detail up next. Depot must carry your product(s). Remember that in most cases, getting on-shelf means displacing Carve Out Your Market another brand’s product(s). You’ll want to make Defining your target market and demonstrating how the case that your Merchant will see a net positive you bring value in your category is imperative when return by swapping in your products for those that pitching to The Home Depot. they remove.

What was the pain point or market insight that sparked the idea for your product? How are you inno- vating in your space? Most importantly, how are you solving a problem for The Home Depot customer? Know the Competitive Landscape Since your product(s) will be sharing shelf space with The Home Depot’s current offerings, you’ll need to understand the competitive landscape in your category. Which vendors are you up against and Online Presence what advantages do you offer over their products? With HD’s focus on a seamless omnichannel strategy, it’s imperative for your own website to look the part. After speaking with dozens of HD suppliers, they We’ll talk about this in more detail in Chapter 3, but unanimously agree that the best place to start one thing we’ll point out here is that “How To” videos is online. You should spend some time surfing and PDF guides are hugely popular with The Home HomeDepot.com to see how other brands are posi- Depot customer, and something HD Merchants tioned and priced. Also, be sure to walk the aisles check your website for when evaluating your fit. and scope out competitor packaging and POP PAGE 09 The Ultimate Guide to Selling at The Home Depot

Chapter 2 Building Your Success at The Home Depot

Congratulations, you’ve made it into The Home Leading brands are in touch with their replenishment Depot! Now the hard work truly begins. Here are team on a weekly basis, especially around promo- some tips to ensure your success: tions. They don’t rely on the CAR system, given that if sales are volatile it won’t always be picked up. Inventory Levels These vendors harness POS data (shared with them Nothing is worse than having an HD shopper come via HDLink or EDI) to support demand planning and looking for your product, only to find the shelf empty. inventory management across stores and regions, working with their Home Depot planning team The Home Depot uses a Centralized Auto Replenish- to ensure that stores are well stocked, especially ment (CAR) system for replenishment. The system during promotions. (Source) is based on seasonally adjusted sales history, maintaining a specified inventory position for Events and Training each SKU in each store. The key parameters within Training and in-store education are very important the CAR system are: targeted inventory position in the home improvement industry, and especially (weeks of supply), supplier turnaround time, transit at The Home Depot. If you walk into your local HD time, review time and minimum order quantities. store, you will often notice some kind of education (Source: HD Supplier Onboarding Guide) PAGE 10 The Ultimate Guide to Selling at The Home Depot

THE HOME DEPOT EVENT DAYS

MEMORIAL DAY FATHER’S DAY INDEPENDENCE LABOR DAY BLACK FRIDAY DAY Last Monday in May Third Sunday in First Monday in Day after July 4th June September Thanksgiving

program going on. Live in-store demonstrations in-store presentations. are one of the best ways to get customers and store associates excited about your products.. Consumer Reviews Standing out on HD shelves can be a challenge, given Remember that a customer who comes to the store the sheer amount and variety of products on display. to do a project or fix a problem will often turn to an Consumer claims on packaging and point-of-sale available Store Associate for advice and guidance. If materials in-store, as well as great online product that Store Associate knows of and believes in your reviews make a huge difference in whether a brand product, he or she can be a highly effective resource gets noticed and purchased by an HD shopper. in driving sales. Sometimes referred to in the industry as ‘belly-to-belly’ training, Product Knowledge (or By making your brand easily discoverable and under- ‘PK’) sessions with store associates can generate standing when and where people are searching for very positive ROI for vendors who invest the time. guidance, you can ensure you’re there with the right advice and product recommendations. And always On the customer side, The Home Depot conducts a be sure to monitor and respond to any reviews - both number of sales “events” over the course of the year, positive and negative - in a timely manner (we’ll typically around national holidays. An event is char- discuss this in more detail in the next chapter). And acterized by heavy advertising, a significant number if you don’t have any reviews on your products yet, of promotional items, extremely aggressive pricing, you might be interested in The Home Depot Seeds consolidated supply chain execution and special Program. PAGE 11 The Ultimate Guide to Selling at The Home Depot

In the past two years, mobile searches for “product reviews” have grown over 35%. Additionally, people are increasingly turning to mobile video to watch reviews. In the past two years, videos with the word “review” in the title had more than 50,000 years worth of watch time on mobile alone. - (Source)

Field Sales and In-Store orders cut, make merchandising changes, and influ- Demos ence store-level execution. Before visits, field reps need a way to quickly identify which stores require In this section we’ll talk about how to leverage field their attention and prioritize their activities in these sales to succeed at The Home Depot and go through stores. a case study of a vendor who’s doing it very well. If you don’t have a field sales team, continue on to the next chapter, where we’ll cover omnichannel at The Home Depot.

Field reps - whether your own employees or third party agents - act as the face of your company in each Home Depot store. They use their knowledge of the store’s sales team to establish trust and loyalty with associates, while ensuring that they are knowl- edgeable about your company’s products. Field reps also help ensure that your products are well merchandised and in stock by verifying inventory levels, which helps to prevent any potential issues with inaccurate inventory counts.

It’s more important than ever to empower your field sales team with data and store-level insights to get

PRO TIP: Leverage The Home Depot Seeds Program The Home Depot Seeds Program enables a select group of Home Depot customers to post their opinions about new and pre-released items to help other customers make educated purchase decisions. Customers are invited to become Seeds Members based on the trust they have earned in the HomeDepot.com community for writing accurate and insightful reviews. The Seeds Program provides Members with free products that have been submitted to Seeds by vendors. Since Seeds Members will receive access to products that are not yet available on the market, their opinions may be among the first posted on a product’s detail page. (Source)

You can find more information on the Seeds Program here. PAGE 12 The Ultimate Guide to Selling at The Home Depot Case Study LP Building Products Uses Mobile To Get Ahead

Louisiana-Pacific Corporation (LP) is a leading manu- Prioritizing stores and measuring the impact of their facturer of quality engineered wood building mate- in-store initiatives has become a breeze. rials, structural framing products, and exterior siding for use in residential and commercial construction. “I couldn’t necessarily tell you what LP products are sold to builders and homeowners through building materials distributors, dealers, was working really well at the store and national retail home centers such as The Home level, until I had Askuity. I can now Depot, Lowe’s and Menards. confidently put a real number on

As a major supplier of building materials to home increases in sales as a direct result of centers, LP has always believed that maintaining an our investment in our field team.” in-store sales team is key to their success at retail. - National Sales Manager Retail, Corporate Marketing and Sales Services at LP

Using Askuity’s Mobile application, members of the LP field team can scan any barcode and instantly pull up sales and inventory metrics for the store that Armed with mobile insights, the entire LP Retail they are currently visiting. They’re able to keep tabs Execution team is accountable, engaged, and on new product launches and ensure that inven- harnessing data to dominate the building products tory levels are sufficient across each of their stores. industry. PAGE 13 The Ultimate Guide to Selling at The Home Depot

Promotions tion for a similar or identical item with POS data in Each HD category has internal goals on sales dollars an easy to understand visualization (e.g., chart or and units for promotions, and Merchants need to graph). have confidence that the thresholds will be met or exceeded in order to select your product. How do Overall, you have to understand which kind of you gain that confidence? By bringing data to the promotions you can win at, and ensure you have the table that is relevant to the promotion and Merchant. inventory and lead times to back them up. Merchants The information you present needs to outline your only award a small handful of promotional oppor- projections and the expected performance of your tunities for their categories, and the key to earning product(s). these opportunities is highlighting the success of past promotions. If your special buy item or New Lower Price (NLP) is likely to drive sales in a complementary category, it’s Additionally, be prepared to present a strong contin- worth noting that in buyer meetings (for example if gency plan for any leftover inventory once your your product needs batteries or elbow grease, and promo period ends. Being able to reduce the inven- therefore is likely to drive incremental sales for those tory risk for the Merchant not only secures more other complimentary products). And when pitching promotion spots, but also positions you for success any kind of promotion, it’s always a plus when you with those promotions. can show the success of a previous year’s promo-

Flyers Special Buys The Home Depot releases weekly A ‘special buy’ is a lower retail price on and special occasion flyers (Black a promotional product for a specified Friday, Holiday, Father’s Day, etc.). HD period of time. This most often refers to Merchants are very conservative with a host buy (an order placed on behalf flyers, which means you’ll often see the of the store by divisional or national same vendors and similar promotions merchandising groups) for a product featured over and over. For example, outside the current mix. any Home Depot vendor will know that the retailer’s Father’s Day flyer will NLPs include NLPs on BBQs and power tools. A new lower price (NLP) means that’s the So if you’re not in either of these catego- new price of the item, having been more ries, you’ll need a data-backed reason expensive previously. You are reducing why your promotion will lead to an the price going forward. equal or greater lift in sales. PAGE 14 The Ultimate Guide to Selling at The Home Depot

Chapter 3 Omnichannel at The Home Depot

The Home Depot takes omnichannel very seriously. Omnichannel is a multichannel approach In fact, in June of 2017 The Home Depot was named to retail that seeks to provide the Omnichannel Retailer of the Year by Internet Retailer. customer with a seamless shopping expe- The home improvement giant is blurring the lines rience across all touchpoints. It considers between in-store and digital shopping with signifi- a variety of channels in a customer’s cant investments in e-commerce, supply chain and shopping journey, starting with research fulfillment initiatives that are not only increasing the customer experience but providing operational effi- before a purchase. Channels include ciencies and cost savings. physical stores, online stores, mobile and app-based stores, and any other methods The Home Depot’s omnichannel strategy includes of transacting with a customer. their physical stores, online, and mobile. Up next Businesses that adopt omni-channel we’ll talk about each of these in more detail, and strategies achieve 91% greater year-over- point out what you need to be aware of to be the best possible partner to The Home Depot in creating year customer retention rates compared a seamless shopping experience for customers. to businesses that don’t. PAGE 15 The Ultimate Guide to Selling at The Home Depot

“You learn so much in the aisles. We’re trying to walk in the shoes of our front-line associates, because that’s our differentiator. There are lots of places you can buy a drill. We want you to come to us because we’re not just interested in the transaction, but in the relationship and in your lifetime purchase behavior. The holy tenets of retail are convenience, selection, value and service. Convenience, selection and value tend to get people in, and service is what brings them back.” - Kevin Hofmann, Home Depot’s CMO. (Source)

Physical Stores Merchant videos are two important components of how the retailer expects successful Merchants to We spoke about The Home Depot’s commitment provide training, and the best vendors are assisting to excellent customer service earlier in this eBook. their Merchants in the execution of these two strat- Did you know that every Thursday their execu- egies. tives shadow employees and serve customers at Atlanta-area stores? Product Knowledge (PK) Training:

Customers FIRST Once educated on the features and benefits of your product(s), the store associates can become strong The Home Depot’s set of behaviors that governs advocates and sales people for your brand. Contact customer service. the Training Coordinator through your Merchant that So, this begs the question: how seamless are you is assigned to your department to begin deploying making product training for The Home Depot? PK training in the field. There are a number of tools Product knowledge (PK) training and monthly available for training that the Training Coordinator can help you choose between.

Monthly Merchant Videos:

On a monthly basis, one or more Merchants will produce a video designed to educate and excite Store Associates. The planning horizon for these videos is typically 3-4 months. Once developed, the videos will be shown in break rooms and during store-level team meetings over the HDTV internal network. Work with your Merchant if you are inter- ested in developing a video featuring your products.

Customers FIRST The Home Depot’s set of behaviors that governs customer service. PAGE 16 The Ultimate Guide to Selling at The Home Depot

Online The Home Depot is one of the largest e-commerce on HomeDepot.com. It’s your responsibility to make retailers in the U.S., with online sales growing from sure the appropriate assets are uploaded and main- $500 million in 2009 to $5 billion in 2016, including tained. 19 percent growth in online sales in the fourth According to industry research, as many as 88% of quarter of 2016. (Source) Listening to the retailer’s consumers are researching items online and then most recent quarterly call recording, you can hear buying in a physical store. So, upload everything you senior executives talking about the likes of Amazon can on that landing page - multiple photos, videos, and Wayfair, and making sure that The Home Depot PDF guides with instructions, etc. And have you is learning from the best practices (and missteps) of noticed how product pages look consistent across these e-commerce giants. HD’s website? It’s no coincidence. This retailer takes The key takeaway in this section is that you’re online seriously, and cracks the whip when you’re responsible for the online presence of any product(s) doing it wrong. You should be performing an audit of you sell at The Home Depot. This includes all of the every product you sell online, not just the ones that data, photos, and visual assets that are displayed make you the most money.

“A Picture is worth a thousand words, and it could potentially be worth a thousand dollars.” - Anonymous vendor.

“We continue to believe that blending the physical and digital channels into a seamless customer experience which we call interconnected retail, provides a unique opportunity for us to expose the power of The Home Depot. This has been and will continue to be one of the central tenets of our company strategy and we will remain committed to the investments in our intercon- nected capabilities. - Craig Menear, Chairman, CEO & President The Home Depot (Source) PAGE 17 The Ultimate Guide to Selling at The Home Depot

Mobile According to Forrester research, 56% of consumers use their mobile device to research products at home with 38% having used their mobile device to check inventory availability while on their way to a store and 34% who have used their mobile device to research products while in a store.

To appeal to the many consumers who research products online and pick them up in store, The Home Depot added new features to its app that let customers virtually try out products. For instance, you can place an image of a faucet on your counter top or snap a photo of your wall to see which shades of paint look the best on it.

If you don’t have an in-house team that can manage your online and mobile presence, you may want to look into hiring a third party. They’ll keep your visual assets up-to-date, and monitor your Q&As and customer reviews.

As a vendor you need to provide all the tools to make it as easy as possible for The Home Depot to display and stock your product(s) across all touchpoints. You’ll need to work closely with your marketing, field sales, operations and/or third party teams to ensure you’re putting your best foot forward.

“It’s important to remember that over 43% of our online transactions are picked up inside of a store. This is One Home Depot, not an online or on in-store business, but it’s One Home Depot.”

-Carol Tomé - The Home Depot, Inc. EVP, Corporate Services & CFO – Q2 2017 Home Depot Earnings Call 08/15/17 PAGE 18 The Ultimate Guide to Selling at The Home Depot Case Study Behr Paints

Behr sells Exterior Paint, Interior Paint and Wood sheer number and quality of customer reviews. Stains exclusively at The Home Depot. With innova- Most are pulled from the Behr website. tive initiatives, Behr is pulling their weight in helping • Promotions and Special Buys: Behr has to drive people in store and are proving to be a a newsletter where customers can stay in- strong partner for The Home Depot. Here are a few formed on hot deals. They sometimes have things that caught our eye: special buys, and keep things interesting with • How-To-Guides: Behr provides visually ap- specialty color promotions. pealing and easy to follow How-to Guides and • Mobile App: Behr created an app where inspiration galleries directly on their website. customers can browse, coordinate and preview • In-store Demos: Behr field reps host pro colours on their smartphones. and regular events across different Home De- • Social Pages: Behr’s social pages are cre- pot locations, with professional advice, semi- ative, and draw in a big following. On Insta- nars, and hands-on training. gram alone, they have over 35k followers.

• Customer Service: There is always a ded- This example illustrates the importance of coming to icated associate in the Behr section of each the table with fresh ideas and treating your relation- Home Depot store, ready to answer any ques- ship with The Home Depot as a partnership. Behr tions, give helpful tips, and provide recommen- Paints succeeds at The Home Depot because they dations and inspiration. don’t just rely on the retailer to move their product • Customer Reviews: If you do a quick search - they’re proactively doing everything in their power on HomeDepot.com for Behr, you’ll see the to make buying their products exciting and easy. PAGE 19 The Ultimate Guide to Selling at The Home Depot

Chapter 4 How to Succeed at Trade Shows

As we mentioned in Chapter 1, trade shows (The your booth is demonstrating that you’re thinking National Hardware Show in particular) are the about where your industry is going and innovating perfect place to meet and impress Merchants. The your products within it. Whether it’s a new product NHS is the ultimate event for face-to-face sourcing, launch, packaging refresh or an exciting promo- trading and learning for the $343 billion dollar US tion, there should always be something that you’re home improvement and DIY markets. ‘unveiling’ to excite people to come to your booth. You don’t necessarily need to introduce a new • 83% of NHS attendees say new products/ product to capture a Merchant’s attention - you can categories are the primary reason to attend show the benefit of an existing product in a different • 86% of NHS attendees plan on purchasing way that will spark ideas. and sourcing new products when they attend • 28% of NHS attendees estimate over a $10 million annual budget for products and ser- vices seen at the show

As these stats show, Merchants take the time to go to tradeshows because they’re always on the hunt for the latest and greatest products for their categories.

More important than snagging the perfect spot for PAGE 20 The Ultimate Guide to Selling at The Home Depot

In his 30+ years of building materials sales and You should also be aware of HD’s Store Managers marketing experience, Mark Mitchell from Whizard Meeting: Strategy has attended his fair share of trade shows. Once a year, all HD store managers gather for a week- We asked him how to make sure your trade show long series of meetings. Typically, this meeting takes efforts pay off. His advice was: apply to deliver an place in the March or April time frame, ahead of the educational seminar or be on a panel. Make sure Spring selling season. Among other activities, there your senior management spends time with key is a convention hall where suppliers are able to set customers and key targets. Make appointments up booths to highlight new and innovative products. with the media and give them a tour of your booth. The meeting represents one of the few opportuni- Make your event or party a memorable experience ties for a supplier to market its products directly to or don’t do it. the national store leadership, and is often seen as a good time to launch new concepts.

“Show me that you know what’s trending, and cater your products to what the trend is going to be. Take the opportunity to educate me”

- Anonymous Merchant, 10 More Things Your Buyer Hates About You eBook. PAGE 21 The Ultimate Guide to Selling at The Home Depot

Chapter 5 Home Depot Merchant Meetings and Line Reviews

A Business Review (BR) is the process of reviewing supplier performance, product performance, and Business Review other future initiatives. Suppliers will be asked at A detailed analysis of various times throughout the BR process to partic- a category with minimal supplier inputs that result in ipate and submit information. Depending on the non- invasive changes to the store. situation, a Merchant may choose to disclose or Ex: Inventory and line strutcture not disclose that he/she is conducting a Business optimization, SKU-store clustering, new product innovation. Review. product performance A Product Line Review (PLR) is a more-detailed reviews, supplier type of BR. The main purpose of a PLR is to consider performance reviews multiple suppliers for a category. Typically, your Merchant will call for a PLR when they are consid- Product Line Review ering major changes to a category like a new assort- Similar to a business review but includes significant supplier inputs, ment, new merchandising or new products (cost focusing on category revitaliza- savings, quality of product, or some other need tion. Ex: Supplier changes, cost negotiations, major SKU that they have that’s not currently being met by or supplier product the vendors in their category). Typically a PLR will transitions. include only a portion of your product offerings. PAGE 22 The Ultimate Guide to Selling at The Home Depot

PRO TIP Always stay on top of your external market analysis and comp shop documents - don’t wait and scramble right before your PLR. If you work on these year-round, it becomes a much easier process.

Speaking with vendors who sell into The Home your buying team. Use every touchpoint with your Depot, we found that there’s a big variance in how Merchant as an opportunity to demonstrate value often PLRs happen. Depending on how established and bring up anything that might become an issue. your brand is and the category you compete in, you Being proactive demonstrates that you are invested can expect to have your PLRs anywhere from every in the retailer relationship. six months to four years. It will last for about one The best vendors are able to be critical and concise hour and you’ll be in front of six to seven people. on how targets were met or missed and they are Depending on your Merchant, sometimes you’ll transparent about the performance of SKUs. They email your supporting documents directly or be communicate well ahead of line reviews and keep asked to submit through HDLink. Merchants posted on how individual SKUs are What remains constant, though, is that successful moving throughout the year. Their recommenda- vendors treat their line reviews as an ongoing process tions are supported with point-of-sale and market no matter how often they take place. After all, any data whenever possible, and they send information meeting with your Merchant, not just the big ones, is and presentation decks ahead of all meetings, to absolutely vital in building a strong relationship with ensure that their Merchant is never surprised.

MANDATORY FOR A HOME DEPOT PLR External market analysis and comp shop A good external market analysis identifies the brands playing in your space, what’s going on with other retailers as well as The Home Depot, any interesting trends, etc.

A comp shop takes a detailed look at your compet- itive landscape. Someone (usually a junior team Bid Sheet member) will need to go around to different retailers A bid sheet includes all your products at the price - Lowe’s, Menard’s, Walmart, Tractor Supply, The you want to sell for. It should factor in rebates and Home Depot, etc. - and match similar items on a anything else that will help The Home Depot clearly spreadsheet, corresponding with a photo and the see their net profits. price of each one. PAGE 23 The Ultimate Guide to Selling at The Home Depot

Remember, The Home Depot Merchants are faced Merchants also want to know what kind of marketing with numerous different brands and categories. To support you are going to be providing. What do you take it one step further and really set yourself apart, have planned in terms of trade and brand marketing? be sure to integrate data into your presentations. An Are you going to be doing NLPs, endcaps, cross intuitive way to think of it is on a macro and micro merchandising? Do you have any major partnerships level. or regional events coming up? What kind of invest- ment are you going to make in education? How are Macro you going to be training people at the Pro Desk. Do How is the category performing? What are the you have field reps? How important is online to your trends? Who are your competitors and how are you assortment? If you expect a significant portion of differentiated? sales online, what’s your budget for ad spend online?

When asked about the most important metric to point to in Merchant meetings, Year to Date (YTD) sales was referred to as the the gold standard by the vendors we interviewed. To accurately calculate YTD sales versus last year, it is important to leverage The Home Depot’s Assortment Maintenance Tool (AMT), which is used to identify comparable stores for your entire product lineup. Using the AMT report, vendors Micro are able to see an apples to apples comparison of year-over-year product sales by measuring sales Within The Home Depot, what products are you performance for comp stores. Generally, you will selling where and to whom? How do people usually use AMT if your products are not in all stores or if the buy your products? Are there factors that affect your assortment in your category varies by store. assortment and sales (rural versus urban, region- ality, seasonality, etc.)? What are your minimums Stay on top of current events and be sure to address and maximums? How accurate is your planning and any potential risks in your forecasts with your forecasting? What are your online sales and projec- Merchant. Be aware of risks that may impact your tions? manufacturing time, shipment dates, or sales in a particular region (for example, an earthquake close to your manufacturing plant).

PRO TIP Your supply chain team will often know the current news affecting your business. You should also set up Google Alerts for anything that might impact your business. PAGE 24 The Ultimate Guide to Selling at The Home Depot

Always have granular POS data on hand when In summary, successful Merchant meetings require meeting with Merchants. Take the opportunity to preparation, being the category expert, coming showcase store-level insights and trends, and show to the table with fresh ideas, and speaking the your Merchants where money is potentially being Merchant’s language. You should always have sales left on the table. Is there another store where your metrics and data to support your suggestions. product(s) should be listed? Use POS data to high- Familiarizing yourself with The Home Depot’s light the sales lift for past promotions, including internal language and using it in meetings with NLPs and special buys. Merchants will set you apart from other vendors. When creating graphs, go the extra mile and annotate For more tips on line reviews (and what not to do), them to provide commentary around any dips or check out our eBook: 10 More Things Your Buyer spikes in sales. Did you have an NLP or special buy? Hates About You. Did a weather emergency affect sales?

“Merchants always want to see the data to back up the thought. They want the quick takeaways, not to spend 10 minutes looking at your charts and trying to figure out what exactly you’re trying to say.”

- Home Depot National Account Manager, Plews and Edelmann PAGE 25 The Ultimate Guide to Selling at The Home Depot Final Thoughts

The home improvement industry moves quickly and has a big focus on innovation. To be successful, your product has to stand out and bring unique value above what the competition offers.

In speaking with consultants who help brands win listings in big box retailers, as well as clients who are succeeding on HD shelves, the advice was consis- tent: have great products, highlight your differenti- ated positioning, know your numbers, and stand out online. Anything a brand can do to support the expe- rience of The Home Depot customer, especially as it relates to a seamless omnichannel shopping experi- ence, adds value to the retailer relationship.

Above all else, your brand has to be compelling for Home Depot shoppers and your numbers must prove a strong business case. Starting from your pitch all the way to your line reviews, be sure to articulate a strong story that encompasses innovation, online initiatives, and external market and POS data. If you do that, then you’ll be well on your way to building a long and prosperous relationship with North Ameri- ca’s most popular home improvement retailer. PAGE 26 The Ultimate Guide to Selling at The Home Depot

About the Author Resources Marsha Druker is a Marketing The Home Depot Corporate Website - About Page Manager at Askuity. She launched How to sell your product to large retailers her career in the CPG industry, The Home Depot Link - Become a Supplier working on six different brands Home Depot and Lowe’s succeed at omnichannel at Jarden (now Newell Brands). She’s passionate How to Sell New Products to Home Depot about technology, startups and marketing. Tips for Getting Your Product in Big Box Stores About Askuity Home Depot Named Omnichannel Retailer of The Year Askuity’s industry-leading sales Micro-Moments Now: Why you should be the adviser enablement platform empowers consumers are searching for home improvement brands to turn point of sale data into profitable How the retailer meets the changing needs of insights that help grow sales, improve margins and contractors and consumers strengthen retailer relationships. 25 Amazing Omnichannel Statistics Every Marketer Should Know Learn how the Askuity platform can help your brand Meet The Man Behind The Merchandise: Ted Decker succeed at The Home Depot and other national Home Depot Now Makes $5 Billion Online, but a retailers. Stellar Store Experience Remains Its Top Priority Who Is Home Depot’s Favorite Customer? Home Depot Pours Investment Into Interconnected Retail Mark Mitchell - Whizard Strategy

CLICK HERE TO LEARN MORE ABOUT ASKUITY Additional Content For Home Improvement Vendors

Webinar: 5 Things You Need To Rock Your Next Buyer Meeting A special guest of Plews & Edelmann uncovers the top 5 things you need to impress your merchant for your next buyer meeting.

Webinar: How To Dominate Your Category With Field Sales A field sales expert from LP Building Products discusses the importance of investing in your field sales team and how to optimize that investment.

eBook: 10 More Things Your Buyer Hates About You The highly requested update to Volume I, 10 More Things Your Buyer Hates About You is packed with even more blunders by product vendors and actionable tips from real buyers across various industries

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